Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 107.101 107.04-08 | EURUSD 1.14037 1.1392-99 | AUDUSD 0.73667 0.7321-74 | NZDUSD 0.68386 0.6812-37 | USDCAD 1.29068 1.2954-57 | USDCHF 0.97257 0.9720-25 | GBPUSD 1.44289 1.4412-18 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.14121 | 1.13806

USDJPY                 107.635 | 107.067

GBPUSD               1.44411 | 1.44065

USDCHF               0.97353 | 0.97063

AUDUSD              0.73859 | 0.73496
USDCAD               1.29555 | 1.29201

NZDUSD               0.68486 | 0.68194

EURCHF                1.10878 | 1.10761

EURGBP               0.79065 | 0.78905

EURJPY                 122.506 | 122.027

For today

• EUR: A quiet session overall with the Euro’s struggling in early trading to drift towards the 1.1380 levels before USD’s started to drift lower across the board and the Euro managed to make its way above the 1.1400 levels to test into the 1.1410 areas into the grey hour, Topside offers light through to the 1.1480 levels and likely to continue to the 1.1500 areas with possible weak stops beyond and the market then seeing light selling only through to the 1.1550 area and then increasing over the next 50 pips or so. Downside weakness through the 1.1380-70 areas will see light congestion through to the 1.1320-00 areas and then likely better bids through the level.
• GBP: Cable ranged quietly around the opening 1.4420 areas levels before weakly testing to the 1.4410 levels, USD weakness then saw the cable starting to rise through to the grey hours with the market testing above the 1.4440 levels briefly, topside offers through the 1.4450 levels likely to be light with the offers not likely to strengthen until the market moves through to the 1.4520 levels with the likelihood of some minor stops through the level and the market opening for a further test of the 1.4600 levels. Downside bids into the 1.4400 areas and likely to extend a little through the level, further limited bids likely as the market pushes through the 1.4350 areas before the 1.4300 stronger areas become vulnerable.
• JPY: USDJPY ran a little higher from the opening with the pair rising with the comments from the BoJ helping the move to the 107.60 areas before the market dipped back a little even so the market has kept in touch through the later part of the session and moves into the grey hours holding the 107.50 areas. Topside offers likely into the 108.00 areas and then possibly struggling with offers moving through from there into the 108.50 levels, only a strong break back through the 109 levels opens the topside to the ranges of last month, Downside bids light through 107.00 with those bids likely to continue weakly to a stronger 106.50 areas with weak stops likely below the level however, the downside move is probably for the moment contained in the 105.50 area.
• AUD: A very quiet session for the Oz with the market moving around the 0.7370-80 levels for the most part having lifted off the 0.7360 areas on the opening, downside bids into the 0.7350 areas and although cleared on the NFP is likely to still have bids continuing to the 73 cent levels. Topside offer on a push through the 74 cent level are likely to be thin on the ground and the market opening to a possible short squeeze however, this would go against the fundamental situation for the time being.

Overnight News                                                                  

CNY:

China Shouldn’t Loosen Money Conditions for Growth: Daily

China Should Give High Priority to De-Leveraging: People’s Daily

IMF’s Lipton Says China’s Economy in Transition Period: News

China Banks May Need to Raise Capital for Bad Loan ABS: Fitch

JPY:

Finance Minister Aso Says Japan Has Means to Intervene

Japan Considering Spending 1t Yen for Kumamoto Relief: Nikkei

Some BOJ Members: Excessive Expectations for More Easing Created

BOJ Board Member Sakurai’s Credentials Questioned by Shukan Post

Suga: Aware of Tabloid Report Doubting Resume of BOJ’s Sakurai

Japan’s March Cash Earnings Rise 1.4%; Est. +0.6%

EUR:

Greece, Creditors to Discuss Greek Debt Monday: Greek Official

Tsipras Says Eurogroup Significant Opportunity for Greek Debt

KRW:

1. Korea’s Military Talks Offer Has No ’Sincerity’: S. Korea

AUD:

Australia ANZ April Job Advertisements Fall 0.8% M/m

NZD:

Key Says New Zealand Doesn’t Meet OECD Criteria to Be Tax Haven

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

JPY         Labour Cash Earnings Y/Y Mar A 1.40% | C 0.60% | P 1.00% | R 0.70%

JPY         Consumer Confidence Index Apr A 40.8 | C 40.8 | P 41.7

06:00     EUR        German Factory Orders M/M Mar C 0.70% | P -1.20%

07:15     CHF        CPI M/M Apr P 0.10%

07:15     CHF        CPI Y/Y Apr P -0.70%

08:30     EUR        Eurozone Sentix Investor Confidence May C 6.1 | P 5.7

12:15     CAD       Housing Starts Apr C 195K | P 204.3K

14:00     USD       Labour Market Conditions Index Change Apr P -2.1

Weekend News

CNY:

China End-April Forex Reserves at $3.22t; Est. $3.20t
China’s April Exports Rise 4.1% Y/y in Yuan Terms
China April Exports Fall 1.8% Y/y in USD; Est. Flat
EUR:

EU Commission Says Greek Bailout Program Broadly on Track
Greece To Remove Impediments to NPL Sales: EU Document
New Draft Greece Pact Includes Contingency Measures of 2% GDP
EU’s Juncker Expects Refugee Crisis to Ease Soon: Funke
Greek Pension Reform Targeted by Lawmakers Before Bailout Review
SAR:

Saudi Oil Minister Al-Naimi Replaced by Al-Falih: Al Arabiya
Saudi Replaces Central Bank Governor in Major Reorganization
SGD:

Singapore’s Ruling Party Candidate Wins Bukit Batok By-Election
KRW:

North Korea’s Kim Says He Won’t Use Nukes Unless Attacked
Kim Jong Un Calls for Talks With South Korea to Ease Mistrust
N.Korea to Face Deeper Isolation for Nuclear Arms, S.Korea Says
North Korea Must Give Up Nuclear Arms for Talks, S. Korea Says
AUD:

Turnbull Calls Australia Election for July 2 in Tax Showdown
TRY:

Turkey’s Nationalist Party Ready to Support Government: Hurriyet
Turkey Strikes Islamic State Targets in Syria, Killing 55: AA
New Turkey PM Candidate to Be Announced After May 18: Hurriyet
ZAR:

S.Africa Says Achieving Targets Shows Credibility of Fiscal Plan
PLN:

Polish Opposition Hails Biggest Protest Since Communist Era
DKK:

IMF Urges Action as Negative Rates Infect Danish Property Market

Harry Hindsight

• EUR: Through the Asian session and into London the Euro was a little quiet with the market moving around the 1.1400 levels through Asian and then rising into the London session to trade into a 1.1420-30 range through to the release of the NFP, with NFP showing lower than expected the market spiked to the 1.1480 levels before dropping as the average earnings came in unchanged to expectations, this reversed the market and the dip back to the previous levels followed, and once that was over with the market again settled into trading around the 1.1420 areas before drifting back through the 1.1400 levels and setting the lows just below 1.1390 and holding just above the 1.1400 levels to the close.
• GBP: The Cable drifted through the Asian session with the market moving towards the 1.4490 levels before drifting back to the 1.4480 and into early lows on the London opening, buying through early part of London saw the market gradually pushing through to the 1.4520 levels before slowing and holding around the 1.4500 levels into the release of the NFP and a similar pattern as the USD initially dipped on the weaker NFP before recovering and the market dropping from the 1.4550 areas to test the 1.4420 level in a quick move ranging through the NYK session around the 1.4450 levels before testing through the lows a little and closing just off those lows.
• JPY: USDJPY drifted from the opening 107.25 levels touching the 107.40 area before the market started to slip back as more of a consequence of the RBA Monetary policy, holding the 107.10 levels into London before slipping below the figure level and drifting sideways until the release of the NFP, the market dropped on the release only to recover after an extended period to eventually make its recovery to close to the opening levels.
• AUD: Opening quietly the market managed to rise towards the 0.7480 levels before dropping quickly on the Monetary policy statement, with a downward revision for future CPI numbers and a reasonably dovish commentary, this sent the market lower trading quickly through to the 74 cent levels before holding into the London session, the opening in London saw the market push to the 0.7370 areas and the market then traded around the 0.7360 areas to the close, and although the market spiked towards the 74 cent level and then tested to the 0.7340 area the market was fairly calm through to the close.

Friday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

JPY         Monetary Base Y/Y Apr A 26.80% | C 29.30% | P 28.50%

AUD       RBA Monetary Policy Statement

CHF        Foreign Currency Reserves Apr A 588B | P 576B

USD       Change in Non-farm Payrolls Apr A 160K | C 206K | P 215K | R 208K

USD       Unemployment Rate Apr A 5.00% | C 5.00% | P 5.00%

USD       Average Hourly Earnings M/M Apr A 0.30% | C 0.30% | P 0.30%

CAD       Net Change in Employment Apr A -2.1K | C 0.2K | P 40.6K

CAD       Unemployment Rate Apr A 7.10% | C 7.20% | P 7.10%

CAD       Ivey PMI Apr A 53.1 | C 52.5 | P 50.1

Stay lucky

Andy

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